Former Wells Fargo Advisor Pleads Guilty to $3 Million Fraud Scheme

Posted on December 10th, 2024 at 11:18 AM
Former Wells Fargo Advisor Pleads Guilty to $3 Million Fraud Scheme

From the desk of Jim Eccleston at Eccleston Law

A former Wells Fargo advisor, Kenneth A. Welsh, has pleaded guilty to charges of wire fraud and investment advisor fraud after stealing over $3 million from his clients, according to WealthManagement.

From July 2017 to March 2021, Welsh used his position as an investment advisor in New Jersey to defraud five clients by building personal relationships and gaining their trust. He had clients sign blank forms under the guise of “routine account maintenance” but later used those forms to transfer about $2.6 million from their brokerage accounts to accounts held by his relatives. Welsh spent the stolen funds on gambling and luxury goods. Additionally, he forged and manipulated distribution request forms to create cashier’s checks totaling around $268,740, which he used to buy gold and other precious metals from a local New Jersey business.

The DOJ also noted that Welsh provided at least one falsified account statement, indicating that a client’s assets were invested when he had already misappropriated the funds. As reported by WealthManagement, Welsh’s fraudulent activities involved transferring client funds without their authorization, often through Automated Clearing House (ACH) transactions into credit card accounts held by his family members. In one incident, Welsh funneled $45,000 from an elderly client’s advisory account into his mother’s credit card account. The SEC's 2021 complaint reported that Welsh executed approximately 123 unauthorized transactions.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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